CARES Act Retirement Plan Relief Provisions

04-24-2020Retirement

The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020.

For those seeking access to their retirement funds, these include special provisions for coronavirus-related distributions and loans. For those seeking to preserve their retirement funds, certain required minimum distributions from retirement funds have been suspended.

Coronavirus-related distributions

A 10% penalty tax generally applies to distributions from an employer retirement plan or individual retirement account (IRA) before age 59½ unless an exception applies. Due to the coronavirus pandemic, the penalty tax will not apply to up to $100,000 of coronavirus-related distributions to an individual during 2020. Additionally, income resulting from a coronavirus-related distribution is spread over a three-year period for tax purposes unless an individual elects otherwise. Coronavirus-related distributions can also be paid back to an eligible retirement plan within three years of the day after the distribution was received.

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IRS Economic impact payments: What you need to know

03-31-2020Tax Information

The Treasury Department is working on a web-based portal (www.irs.gov) that will allow individuals to submit direct deposit details in order to “receive payments immediately as opposed to checks in the mail.”  Treasury Secretary Steven Mnuchin said Friday that people can expect to receive their checks in three weeks – April 17 is when the direct deposits will go into people’s accounts.  A check in the mail could take longer.

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CARES Act Summary Article

03-29-2020Legislation

The Coronavirus Aid, Relief, and Economic Security Act (CARES) (P.L. 116-136), signed into law March 27, features several different relief programs to help businesses stay afloat, but some of them are mutually exclusive, meaning business owners need to understand each one.

Like you, our firm is monitoring the situation and awaiting guidance from the IRS to implement many of these provisions. In addition, our firm needs to await software companies to make coding changes to allow us to process some of these provisions for our clients.

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IRS Economic impact payments: What you need to know

03-31-2020Tax Information

The Treasury Department is working on a web-based portal (www.irs.gov) that will allow individuals to submit direct deposit details in order to “receive payments immediately as opposed to checks in the mail.”  Treasury Secretary Steven Mnuchin said Friday that people can expect to receive their checks in three weeks – April 17 is when the direct deposits will go into people’s accounts.  A check in the mail could take longer.

READ MORE

CARES Act Summary Article

03-29-2020Legislation

The Coronavirus Aid, Relief, and Economic Security Act (CARES) (P.L. 116-136), signed into law March 27, features several different relief programs to help businesses stay afloat, but some of them are mutually exclusive, meaning business owners need to understand each one.

Like you, our firm is monitoring the situation and awaiting guidance from the IRS to implement many of these provisions. In addition, our firm needs to await software companies to make coding changes to allow us to process some of these provisions for our clients.

READ MORE

Charitable Donations

02-20-2020Tax Information

When it comes to tax planning, there are few more emotionally charged decisions than those around charitable giving. People tend to have deep, personal attachments to the causes they support and may have been donating to their chosen charity for years or even decades. They see their donations as a vital way to give back to society and to feel connected to a broader community, whether it be on a local, national or even spiritual level.

Any good financial adviser understands that it’s hard for clients to make a pragmatic cost-benefit analysis around such personal decisions. However, it’s our responsibility to make sure that clients understand how to optimize their charitable donations and ensure that they’re getting the most bang for their buck, both for their charitable causes and their own personal tax benefit. And there’s no better time to do that than at the beginning of the year, after the mad scramble around the holidays has died down.

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The need to properly document travel deductions for tax purposes

02-06-2020Tax Information

You are generally entitled to deduct the cost of your travel expenses, within certain limits. But the tax law imposes strict substantiation requirements. Recently, the Tax Court denied a deduction because the taxpayer didn’t establish the requisite relationship between his business and the travel expenses. (Near, TC Memo 2020-10, 1/14/20)

Most self-employed individuals can deduct ordinary and necessary expenses incurred when traveling on business. This includes transportation costs back and forth from your business destination, as well as any business-related expenses at your business destination, such as lodging. The full amount is deductible if the trip is completely business-related.

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Key Changes to 2019 Arizona Income Tax Returns

01-30-2020Tax Information

The individual income tax filing season for state and federal returns opened this week. Here are some key changes when filing for 2019 tax year.

  • Matches the federal standard deduction amount
    • $12,200 single/married filing separate
    • $18,350 head of household
    • $24,400 married filing joint
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2019 Arizona Individual Income Tax Changes

12-18-2019Tax Information

Are Arizona itemized deductions the same as the federal itemized deductions?

Arizona itemized deductions are the same as the federal itemized deductions except:

  • All qualified medical expenses are allowed.
  • Any charitable donations claimed on the federal return for which an Arizona credit is claimed, must be removed from the Arizona itemized deductions.
  • Arizona will allow a deduction for mortgage interest not allowed on the federal return due to claiming a federal mortgage credit.
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How to benefit from a Home Office Deduction

11-06-2019Tax Information

A home office deduction can be taken when a taxpayer uses a portion of their home exclusively, and on a regular basis, for any of the following:

  • As the taxpayer’s main place of business.
  • As a place of business where the taxpayer meets patients, clients or customers. The taxpayer must meet these people in the normal course of business.
  • If it is a separate structure that is not attached to the taxpayer’s home. The taxpayer must use this structure in connection with their business
  • A place where the taxpayer stores inventory or samples. This place must be the sole, fixed location of their business.
  • Under certain circumstances, the structure where the taxpayer provides day care services.
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Employee vs Independent Contractor

10-30-2019Tax Information

Employers, please be aware that just because you think someone is an Independent Contractor, the IRS and Tax Court might not agree.

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5 tips for effective not-for-profit board oversight

09-17-2019Investments

The attached link is to an article in the Journal of Accountancy that is a good reminder to those individuals involved with non-profit organizations.

www.journalofaccountancy.com/news/2019/sep/not-for-profit-board-oversight-201922017.html

Summary:

  • Recruit board members with the time and skill sets that contribute to a well-rounded board
  • Train members on their roles and responsibilities
  • Take good minutes
  • Set the yearly board calendar appropriately
  • Address board members who aren’t performing or contributing

Redesigned W-4 Form

08-13-2019Tax Information
IRS releases new W-4 for 2020

The Internal Revenue Service released a redesigned Form W-4 for tax year 2020. The redesigned Form W-4 employs a building block approach to replace complex worksheets with more straightforward questions that make it simpler for you to figure a more accurate withholding. The new form uses a more personalized, step-by-step approach.

Employees who have submitted a Form W-4 in any year before 2020 are not required to submit a new form merely because of the redesign. Employers will continue to compute withholding based on the information from the employee’s most recently submitted Form W-4.